Further signs of big job losses to come

CBA boss Matt Comyn expects the unemployment rate to reach around 5.25 per cent by the end of 2021.
CBA boss Matt Comyn expects the unemployment rate to reach around 5.25 per cent by the end of 2021.

The bosses of two of Australia's big four banks are not as pessimistic as the Reserve Bank on the outlook for unemployment, but new data is pointing to further big employment losses.

In a recent speech, RBA governor Philip Lowe warned the unemployment rate could reach the "high fives" in the near term, with the economy set to contract by at least two per cent in the September quarter due to virus lockdowns.

The unemployment rate currently stands at 4.5 per cent.

Commonwealth Bank of Australia chief executive Matt Comyn told federal politicians his bank expects the unemployment rate to reach around 5.25 per cent by the end of the year, before returning below five per cent in the second half of 2022.

"Importantly, recent data show the loss of income from reduced hours worked is being offset by government payments and Australians continue to accumulate increased savings," Mr Comyn told the House of Representatives economics committee on Thursday.

ANZ CEO Shayne Elliott separately told the hearing that while unemployment would increase in coming months, the bank's data suggested there was an underlying resilience in the jobs market.

"When COVID first hit, companies let go of employees to control cost. Government support programs were quickly developed to reduce that impact," he told the hearing.

"Now, despite extended lockdowns, many employers are keeping people in jobs in anticipation of restrictions lifting and staff shortages."

Even so, new figures show payroll jobs tumbled 1.3 per cent in the fortnight to August 28, with the largest hits taken in locked-down areas.

The Australian Bureau of Statistics said the fall compared with a 0.4 per cent drop in the previous two weeks.

Westpac senior economist Justin Smirk said if this momentum continued through to the following two weeks, it would be consistent with job losses of up to 200,000 in the September labour force survey.

Last week's monthly labour force report, which was surveyed in the first two weeks of August, showed the number of people in employment slumped by 146,300.

Thursday's ABS data showed the biggest decline was in the ACT, down 7.1 per cent, followed by a 2.8 per cent fall in Victoria and 1.6 per cent drop in NSW.

However, as a share of the fall in payrolls in the fortnight, 54.4 per cent were in Victoria and 34.2 per cent were in NSW.

Despite this gloomy outlook, separate ABS data showed household wealth increased by 5.8 per cent in the June quarter, or by $735 billion.

Wealth per capita rose to a record high of $522,032.

This growth was largely driven by residential property prices, which recorded the strongest quarterly growth ever at 6.7 per cent.

"The strong property price growth reflected record low interest rates, rising consumer confidence and demand being greater than the levels of housing stock on the market," ABS head of finance and wealth Katherine Keenan said.

Australian Associated Press